Now, my Z68 motherboard has "smart response" which allows it to use a SSD drive to speed up the most used files on my computer.

Worth mentioning I use 4 disks total, totalling about 6 terrabytes, but only the system data and my games are worth speeding up. I have a few hundred gigs of games so I cant put them all on the SSD, but I could put the OS there.

I assume putting the OS on the SSD would speed it up quite a bit. Oh the other hand, I assume the Smart system would speed up games more. Finally, I guess I could split it, 32 go for the cache and 32 go for the OS drive... would that even work?

Here is caching vs no caching and as you can see the difference is huge. However it doesnt show caching vs SSD only. I would guess that those numbers would be close so I guess the question is do you want your system to boot slightly faster or your games and apps to be faster as well.